1. What we will be focusing on Impact on the affordability of housing Effect on TA Risk of legal...

What we will be focusing on • Impact on the

affordability of housing

• Effect on TA• Risk of legal

challenge

• Use of DHPs

• Assessment of New Burdens

Impact on affordability• At first, Benefit

Cap applied as HB restriction

• A bigger impact than 14% / 25% Bedroom Tax

• No allowance is made for number of children or the tenure / location

Impact on affordability• Social housing

• Homes let at the Affordable Rent

• Private rented accommodation (at LHA rates)

• Travellers sites

• Temporary accommodation

Example 1: affordabilityCouncil tenant with 5 children Rent: £117.86 per week

27% of rent is not being met

Receiving Child Benefit, Child Tax Credit and JSA

Example 2: affordabilityCouncil tenants with 4 children Rent: £115.12 per week


Receiving Child Benefit, Child Tax Credit and ESA

Example 3: affordabilityCouncil tenants with 5 children Rent: £142.92 per week


Receiving Child Benefit, Child Tax Credit, Carer’s Allowance and Income Support

Example 4: affordabilityHousing association tenants with 5 children Rent: £131.97 per week


Receiving Child Benefit, Child Tax Credit and Income Support

Example 5: affordabilityHousing association tenants with 4 children Rent: £266.60 per week



Example 6: affordabilityHousing association tenant with 6 children Rent: £132.23 per week



Example 7: affordabilityPrivate tenant with 3 children Rent: £288.46 per week



Example 8: affordabilityPrivate tenants with 3 children Rent: £288.46 per week



Example 9: affordabilityPrivate tenant with 6 children Rent: £369.00 per week



Impact on affordability• London’s private

rented sector is overheating

• Private landlords are reacting more quickly to arrears

• Significant increase in family evictions

• Harder to end LA homelessness duty

Potential monthly rent shortfalls Couple with 4 children living in private rented 3-bed home

£810

£862

£555£680

£654

£1,007

£862

£910

£654

£555

Based on April 2013 LHA / Benefit Rates


£1,347

£1,453

£1,147£1,147

£1,147

£1,551

£1,551

£1,551

£1,196

£1,147



£1,529

£1,633

£1,326£1,326

£1,326

£1,731

£1,731

£1,731

£1,373

£1,326


Impact on affordability• London’s housing

associations have started to ‘screen’ prospective tenants

• Some are reducing exposure on TA and/or maximising Affordable Rent

• Many are making matters worse

Impact of these changes • More homelessness

• Increased use of TA• Increased mobility

(from expensive to less expensive areas)

• Uncollected rent (TA and social housing)

• Landlords of last resort (residualisation)

19

Effect of Benefit Cap on TA• Substantial TA rent

shortfalls resulting from existing / new households

• Increased reliance on the use of TA

• TA rent levels are very high (leasing)

• Subsidy regime will make it worse

Example 1: effect on TACouple with 3 children Rent: £375.00 per week



Example 2: effect on TALone parent with 4 children Rent: £375.00 per week



Example 3: effect on TACouple with 5 children Rent: £375.00 per week



Example 4: effect on TALone parent with 6 children Rent: £375.00 per week



Effect of Benefit Cap on TA• As boroughs look to

minimise the net cost of providing families with TA, the pace of migration will increase

• This will concentrate TA in lower cost areas, increase competition and inflate rents

• Needs to be managed

Risk of legal challenge• Affordability of TA

(Homelessness Code of Guidance)

• Suitability of TA (size and location)

• Act or omission (intentionality)

• Must have clear policies and good record keeping

Risk of legal challengeParagraph 17.40 of the Code of Guidance:

“ ... authorities [should] regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is [or would be] applicable in respect of the applicant ...”

Risk of legal challengeParagraph 17.40 of the Code of Guidance:

“ ... [housing authorities] need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials ...”

Discretionary Housing Payments• DHPs are only able to

assist transition• £1.35m in 2013/14

compared to £5.2m HB losses:

• £2.5m (Private rented)• £1.9m (Existing TA)• £0.8m (Social rented)

• DHP expected to fall to £0.73m in 2014/15

Discretionary Housing Payments• Cannot fetter

our discretion

• Should consider extra funding

• Must be strategic

• Clear priorities (TA + Prevention + planned move-on)

• Time limited and conditional

Assessment of New Burdens• New Burdens Doctrine• To avoid any increase

in the Council Tax• Extra cost and loss

of income• HB administration• Service requests• Homelessness & TA• Schools, social care,

safeguarding, etc

“Those in unaffordable accommodation make up

only 15% of the stock, therefore given advice

and behavioural changes, short term intervention

can be made through DHPs, thus homelessness

is zero. Caveat that if evidence is presented to

show a benefit cap policy has caused increased

homelessness, despite mitigations being used,

then burden will be reviewed and costed based

on this evidence”.

New Burdens Assessment

17 December 2012

New Burdens

Thank you for listening Any questions?

Phil HarrisTel: 0208 489 [email protected]

1. What we will be focusing on Impact on the affordability of housing Effect on TA Risk of legal...

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